Announces Dividend of $0.42 per Share for Third Quarter
MEDFORD, Ore., Oct. 19, 2022 /PRNewswire/ — Lithia & Driveway (NYSE: LAD) today reported the highest third quarter revenue and earnings per share in company history.
Third quarter 2022 revenue increased 18% to $7.3 billion from $6.2 billion in the third quarter of 2021.
Lithia & Driveway (LAD) Increases Revenue 18%; Reports Diluted EPS of $11.92 and Shares Outstanding Reduced by 10%
Third quarter 2022 net income attributable to LAD per diluted share was $11.92, an 18% increase from $10.11 per diluted share reported in the third quarter of 2021. Adjusted third quarter 2022 net income attributable to LAD per diluted share was $11.08, a 1% decrease compared to $11.21 per diluted share in the same period of 2021. Foreign currency exchange negatively impacted earnings per share by $0.54.
Third quarter 2022 net income was $330 million, a 7% increase compared to net income of $309 million in the same period of 2021. Adjusted third quarter 2022 net income was $307 million, a 10% decrease compared to adjusted net income of $342 million for the same period of 2021.
As shown in the attached non-GAAP reconciliation tables, the 2022 third quarter adjusted results exclude an $0.84 per diluted share net non-core benefit related to a net gain on the sale of stores and a non-cash unrealized investment gain, partially offset by acquisition expenses. The 2021 third quarter adjusted results include a $1.10 per diluted share net non-core charge related to a non-cash unrealized investment loss, loss on redemption of senior notes, acquisition expenses, insurance reserves, and asset impairment.
Third Quarter-Over-Quarter Comparisons and 2022 Performance Highlights:
Revenues increased 18.2%
Gross profit increased 10.5%
Vehicle gross profit per unit of $6,139, down $36
Driveway averaged over 2 million monthly unique visitors in Q3
Driveway transactions increase by 327%
Driveway Finance penetration rate rose to over 11% in Q3
Adjusted SG&A as a percentage of gross profit was 59.6%
“We posted strong results across our business lines this quarter, while navigating the current environment, integrating a steady stream of acquisitions and continuing to grow Driveway and Driveway Finance. Our teams are focused on improving operating leverage as fundamentals normalize across our industry,” said Bryan DeBoer, Lithia & Driveway, President and CEO. “With our size and scale, we are well positioned with financial flexibility and liquidity to continue delivering growth with strong returns as we progress toward achieving our 2025 plan.”
For the first nine months of 2022 revenues increased 29% to $21.2 billion, compared to $16.5 billion in 2021.
Net income attributable to LAD for the first nine months of 2022 was $35.10 per diluted share, compared to $26.91 per diluted share in 2021, an increase of 30%. Adjusted net income attributable to LAD per diluted share for the first nine months of 2022 increased 24% to $35.30 from $28.52 in the same period of 2021. Foreign currency exchange negatively impacted earnings per share by $0.65.
Corporate Development
During the third quarter, LAD acquired six locations, including five Wilde Automotive Group locations in Wisconsin, expanding presence in the North Central region, and Elk Grove Ford in Elk Grove, California. In October, LAD acquired six locations in the Pacific Northwest with Airstream Adventures. LAD has acquired over $3.0 billion in annualized revenues to date in 2022 and $13.3 billion in annualized revenues since the announcement of the 2025 Plan in July 2020.
Balance Sheet Update
LAD ended the third quarter with approximately $1.6 billion in cash and availability on our revolving lines of credit. In addition, unfinanced real estate could provide additional liquidity of approximately $0.4 billion.
Dividend Payment and Share Repurchases
The Board of Directors approved a dividend of $0.42 per share related to third quarter 2022 financial results. The dividend is expected to be paid on November 18, 2022 to shareholders of record on November 11, 2022.
In 2022, LAD repurchased approximately 2.3 million shares at a weighted average price of approximately $281. Under the current share repurchase authorization, approximately $77 remains available.
Third Quarter Earnings Conference Call and Updated Presentation
The third quarter 2022 conference call may be accessed at 10:00 a.m. ET today by telephone at 877-407-8029. An updated presentation highlighting the third quarter 2022 results has been added to our investor relations website. To listen live on our website or for replay, visit investors.lithiadriveway.com and click on quarterly earnings.
About Lithia & Driveway (LAD)
LAD is a growth company focused on profitably consolidating the largest retail sector in North America through providing personal transportation solutions wherever, whenever, and however consumers desire.
Siteswww.lithia.cominvestors.lithiadriveway.comwww.lithiacareers.comwww.driveway.comwww.greencars.comwww.drivewayfinancecorp.com
Lithia & Driveway on Facebookhttps://www.facebook.com/LithiaMotorshttps://www.facebook.com/DrivewayHQ
Lithia & Driveway on Twitterhttps://twitter.com/lithiamotorshttps://twitter.com/DrivewayHQhttps://twitter.com/GreenCarsHQ
Forward-Looking Statements
Certain statements in this presentation, and at times made by our officers and representatives, constitute forward-looking statements within the meaning of the “Safe Harbor”provisions of the Private Securities Litigation Reform Act of 1995. Generally, you can identify forward-looking statements by terms such as “project,” “outlook,” “target,” “may,” “will,” “would,” “should,” “seek,” “expect,” “plan,” “intend,” “forecast,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “likely,” “goal,” “strategy,” “future,” “maintain,” and “continue” or the negative of these terms or other comparable terms. Examples of forward-looking statements in this presentation include, among others, statements regarding:
Future market conditions, including anticipated car and other sales levels and the supply of inventory
Our business strategy and plans, including our 2025 Plan and any business expansion
The growth, expansion, make-up and success of our network, including finding accretive acquisitions and acquiring additional stores
Annualized revenues from acquired stores
The growth and performance of our Driveway e-commerce home solution and Driveway Finance, their synergies and other impacts on our business and our ability to meet Driveway-related targets
The impact of sustainable vehicles and other market and regulatory changes on our business
Our capital allocations and uses and levels of capital expenditures in the future
Expected operating results, such as improved store performance, continued improvement of selling, general and administrative expenses as a percentage of gross profit and any projections
Our anticipated financial condition and liquidity, including from our cash and the future availability of our credit facility, unfinanced real estate and other financing sources
Our continuing to purchase shares under our share repurchase program
Impacts from the continued COVID-19 pandemic on the national and local economies in which we operate, our business operations and consumer demand
Our compliance with financial and restrictive covenants in our credit facility and other debt agreements
Our programs and initiatives for employee recruitment, training, and retention
Our strategies for customer retention, growth, market position, financial results and risk management
Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements in this presentation. Therefore, you should not rely on any of these forward-looking statements. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without limitation:
Future national and local economic and financial conditions, including as a result of the COVID-19 pandemic, inflation and governmental programs and spending
The market for dealerships, including the availability of stores to us for an acceptable price
Changes in customer demand, our relationship with, and the financial and operational stability of, OEMs and other suppliers
Changes in the competitive landscape, including through technology and our ability to deliver new products, services and customer experiences and a portfolio of in-demand and available vehicles
Risks associated with our indebtedness, including available borrowing capacity, interest rates, compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms
The adequacy of our cash flows and other conditions which may affect our ability to fund capital expenditures, obtain favorable financing and pay our quarterly dividend at planned levels
Disruptions to our technology network including computer systems, as well as natural events such as severe weather or man-made or other disruptions of our operating systems, facilities or equipment
Government regulations and legislation
The risks set forth throughout “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in “Part I, Item 1A. Risk Factors” of our most recent Annual Report on Form 10-K, and in “Part II, Item 1A. Risk Factors” of our Quarterly Reports on Form 10-Q, and from time to time in our other filings with the SEC.
Any forward-looking statement made by us in this presentation is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by law, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
Non-GAAP Financial Measures
This presentation contains non-GAAP financial measures such as adjusted net income and diluted earnings per share, adjusted SG&A as a percentage of revenue and gross profit, adjusted operating margin, adjusted operating profit as a percentage of revenue and gross profit, adjusted pre-tax margin and net profit margin, EBITDA, adjusted EBITDA, leveraged EBITDA and adjusted total debt. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not comparable to similarly titled measures used by other companies. As a result, we review any non-GAAP financial measures in connection with a review of the most directly comparable measures calculated in accordance with GAAP. We caution you not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. We present cash flows from operations in the attached tables, adjusted to include the change in non-trade floor plan debt to improve the visibility of cash flows related to vehicle financing. As required by SEC rules, we have reconciled these measures to the most directly comparable GAAP measures in the attachments to this release. We believe the non-GAAP financial measures we present improve the transparency of our disclosures; provide a meaningful presentation of our results from core business operations, because they exclude items not related to core business operations and other non-cash items; and improve the period-to-period comparability of our results from core business operations. These presentations should not be considered an alternative to GAAP measures.
|
LAD |
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|
Consolidated Statements of Operations (Unaudited) |
||||||||||||
|
(In millions except per share data) |
||||||||||||
|
Three months ended |
% |
Nine months ended |
% |
|||||||||
|
Increase |
Increase |
|||||||||||
|
2022 |
2021 |
(Decrease) |
2022 |
2021 |
(Decrease) |
|||||||
|
Revenues: |
||||||||||||
|
New vehicle retail |
$ 3,306.9 |
$ 2,898.2 |
14.1 % |
$ 9,619.4 |
$ 8,237.7 |
16.8 % |
||||||
|
Used vehicle retail |
2,465.8 |
2,079.5 |
18.6 |
7,197.0 |
5,236.6 |
37.4 |
||||||
|
Used vehicle wholesale |
363.2 |
260.9 |
39.2 |
1,131.5 |
613.5 |
84.4 |
||||||
|
Finance and insurance |
333.3 |
297.0 |
12.2 |
977.0 |
765.0 |
27.7 |
||||||
|
Service, body and parts |
712.2 |
578.3 |
23.2 |
2,022.6 |
1,503.4 |
34.5 |
||||||
|
Fleet and other |
114.3 |
55.9 |
104.5 |
293.8 |
166.0 |
77.0 |
||||||
|
Total revenues |
7,295.7 |
6,169.8 |
18.2 % |
21,241.3 |
16,522.2 |
28.6 % |
||||||
|
Cost of sales: |
||||||||||||
|
New vehicle retail |
2,903.2 |
2,548.9 |
13.9 |
8,403.9 |
7,418.0 |
13.3 |
||||||
|
Used vehicle retail |
2,264.5 |
1,846.9 |
22.6 |
6,533.6 |
4,635.2 |
41.0 |
||||||
|
Used vehicle wholesale |
374.8 |
255.2 |
46.9 |
1,131.5 |
586.8 |
92.8 |
||||||
|
Service, body and parts |
328.0 |
275.8 |
18.9 |
945.9 |
704.3 |
34.3 |
||||||
|
Fleet and other |
111.0 |
53.9 |
105.9 |
283.1 |
162.7 |
74.0 |
||||||
|
Total cost of sales |
5,981.5 |
4,980.7 |
20.1 |
17,298.0 |
13,507.0 |
28.1 |
||||||
|
Gross profit |
1,314.2 |
1,189.1 |
10.5 % |
3,943.3 |
3,015.2 |
30.8 % |
||||||
|
Asset impairments |
— |
1.9 |
(100.0) |
— |
1.9 |
(100.0) |
||||||
|
SG&A expense |
749.2 |
673.3 |
11.3 |
2,256.8 |
1,757.6 |
28.4 |
||||||
|
Depreciation and amortization |
41.9 |
34.4 |
21.8 |
122.1 |
91.5 |
33.4 |
||||||
|
Income from operations |
523.1 |
479.5 |
9.1 % |
1,564.4 |
1,164.2 |
34.4 % |
||||||
|
Floor plan interest expense |
(10.7) |
(3.6) |
197.2 |
(19.4) |
(17.0) |
14.1 |
||||||
|
Other interest expense |
(49.6) |
(28.0) |
77.1 |
(114.1) |
(79.6) |
43.3 |
||||||
|
Other income (expense), net |
(7.1) |
(25.7) |
NM |
(37.0) |
(14.6) |
NM |
||||||
|
Income before income taxes |
455.7 |
422.2 |
7.9 % |
1,393.9 |
1,053.0 |
32.4 % |
||||||
|
Income tax expense |
(125.4) |
(113.2) |
10.8 |
(382.1) |
(282.9) |
35.1 |
||||||
|
Income tax rate |
27.5 % |
26.8 % |
27.4 % |
26.9 % |
||||||||
|
Net income |
$ 330.3 |
$ 309.0 |
6.9 % |
$ 1,011.8 |
$ 770.1 |
31.4 % |
||||||
|
Net income attributable to non-controlling interests |
0.5 |
(0.8) |
(162.5) % |
(3.9) |
(0.8) |
387.5 % |
||||||
|
Net income attributable to redeemable non-controlling interest |
(1.2) |
(0.3) |
300.0 % |
(4.5) |
(0.3) |
1,400.0 % |
||||||
|
Net income attributable to LAD |
$ 329.6 |
$ 307.9 |
7.0 % |
$ 1,003.4 |
$ 769.0 |
30.5 % |
||||||
|
Diluted earnings per share attributable to LAD: |
||||||||||||
|
Net income per share |
$ 11.92 |
$ 10.11 |
17.9 % |
$ 35.10 |
$ 26.91 |
30.4 % |
||||||
|
Diluted shares outstanding |
27.6 |
30.5 |
(9.5) % |
28.6 |
28.6 |
— % |
||||||
|
NM – not meaningful |
|
LAD |
||||||||||||
|
Key Performance Metrics (Unaudited) |
||||||||||||
|
Three months ended |
% |
Nine months ended |
% |
|||||||||
|
Increase |
Increase |
|||||||||||
|
2022 |
2021 |
(Decrease) |
2022 |
2021 |
(Decrease) |
|||||||
|
Gross margin |
||||||||||||
|
New vehicle retail |
12.2 % |
12.1 % |
10 bps |
12.6 % |
10.0 % |
260 bps |
||||||
|
Used vehicle retail |
8.2 |
11.2 |
(300) |
9.2 |
11.5 |
(230) |
||||||
|
Finance and insurance |
100.0 |
100.0 |
— |
100.0 |
100.0 |
— |
||||||
|
Service, body and parts |
54.0 |
52.3 |
170 |
53.2 |
53.2 |
— |
||||||
|
Gross profit margin |
18.0 |
19.3 |
(130) |
18.6 |
18.2 |
40 |
||||||
|
Unit sales |
||||||||||||
|
New vehicle retail |
69,743 |
66,894 |
4.3 % |
203,437 |
195,934 |
3.8 % |
||||||
|
Used vehicle retail |
81,215 |
76,362 |
6.4 |
235,930 |
205,643 |
14.7 |
||||||
|
Total retail units sold |
150,958 |
143,256 |
5.4 |
439,367 |
401,577 |
9.4 |
||||||
|
Average selling price |
||||||||||||
|
New vehicle retail |
$ 47,416 |
$ 43,325 |
9.4 % |
$ 47,284 |
$ 42,043 |
12.5 % |
||||||
|
Used vehicle retail |
30,361 |
27,233 |
11.5 |
30,505 |
25,464 |
19.8 |
||||||
|
Average gross profit per unit |
||||||||||||
|
New vehicle retail |
$ 5,789 |
$ 5,221 |
10.9 % |
$ 5,975 |
$ 4,184 |
42.8 % |
||||||
|
Used vehicle retail |
2,478 |
3,046 |
(18.6) |
2,812 |
2,924 |
(3.8) |
||||||
|
Finance and insurance |
2,208 |
2,074 |
6.5 |
2,224 |
1,905 |
16.7 |
||||||
|
Total vehicle(1) |
6,139 |
6,175 |
(0.6) |
6,500 |
5,510 |
18.0 |
||||||
|
Revenue mix |
||||||||||||
|
New vehicle retail |
45.3 % |
47.0 % |
45.3 % |
49.9 % |
||||||||
|
Used vehicle retail |
33.8 |
33.7 |
33.9 |
31.7 |
||||||||
|
Used vehicle wholesale |
5.0 |
4.2 |
5.3 |
3.7 |
||||||||
|
Finance and insurance, net |
4.6 |
4.8 |
4.6 |
4.6 |
||||||||
|
Service, body and parts |
9.8 |
9.4 |
9.5 |
9.1 |
||||||||
|
Fleet and other |
1.5 |
0.9 |
1.4 |
1.0 |
||||||||
|
Gross Profit Mix |
||||||||||||
|
New vehicle retail |
30.7 % |
29.4 % |
30.8 % |
27.2 % |
||||||||
|
Used vehicle retail |
15.3 |
19.6 |
16.8 |
19.9 |
||||||||
|
Used vehicle wholesale |
(0.9) |
0.5 |
— |
0.9 |
||||||||
|
Finance and insurance, net |
25.4 |
25.0 |
24.8 |
25.4 |
||||||||
|
Service, body and parts |
29.2 |
25.3 |
27.3 |
26.5 |
||||||||
|
Fleet and other |
0.3 |
0.2 |
0.3 |
0.1 |
||||||||
|
Adjusted |
As reported |
Adjusted |
As reported |
|||||||||||||
|
Three months |
Three months |
Nine months |
Nine months |
|||||||||||||
|
Other metrics |
2022 |
2021 |
2022 |
2021 |
2022 |
2021 |
2022 |
2021 |
||||||||
|
SG&A as a % of revenue |
10.7 % |
10.8 % |
10.3 % |
10.9 % |
10.8 % |
10.5 % |
10.6 % |
10.6 % |
||||||||
|
SG&A as a % of gross profit |
59.6 |
55.8 |
57.0 |
56.6 |
58.2 |
57.4 |
57.2 |
58.3 |
||||||||
|
Operating profit as a % of revenue |
6.7 |
8.0 |
7.2 |
7.8 |
7.2 |
7.2 |
7.4 |
7.0 |
||||||||
|
Operating profit as a % of gross profit |
37.2 |
41.3 |
39.8 |
40.3 |
38.7 |
39.6 |
39.7 |
38.6 |
||||||||
|
Pretax margin |
5.8 |
7.6 |
6.2 |
6.8 |
6.5 |
6.8 |
6.6 |
6.4 |
||||||||
|
Net profit margin |
4.2 |
5.5 |
4.5 |
5.0 |
4.8 |
4.9 |
4.8 |
4.7 |
||||||||
|
(1) |
Includes the sales and gross profit related to new, used retail, used wholesale and finance and insurance and unit sales for new and used retail |
|
LAD |
||||||||||||
|
Same Store Operating Highlights (Unaudited) |
||||||||||||
|
Three months ended |
% |
Nine months ended |
% |
|||||||||
|
Increase |
Increase |
|||||||||||
|
2022 |
2021 |
(Decrease) |
2022 |
2021 |
(Decrease) |
|||||||
|
Revenues |
||||||||||||
|
New vehicle retail |
$ 2,770.4 |
$ 2,824.5 |
(1.9) % |
$ 7,316.1 |
$ 7,896.8 |
(7.4) % |
||||||
|
Used vehicle retail |
2,180.2 |
2,033.7 |
7.2 |
5,908.5 |
5,058.5 |
16.8 |
||||||
|
Finance and insurance |
285.7 |
289.0 |
(1.1) |
762.4 |
736.9 |
3.5 |
||||||
|
Service, body and parts |
615.2 |
564.6 |
9.0 |
1,599.7 |
1,450.0 |
10.3 |
||||||
|
Total revenues |
6,245.9 |
6,021.1 |
3.7 |
16,585.1 |
15,891.5 |
4.4 |
||||||
|
Gross profit |
||||||||||||
|
New vehicle retail |
$ 334.6 |
$ 342.2 |
(2.2) % |
$ 922.3 |
$ 791.5 |
16.5 % |
||||||
|
Used vehicle retail |
174.9 |
228.6 |
(23.5) |
534.1 |
582.3 |
(8.3) |
||||||
|
Finance and insurance |
285.7 |
289.0 |
(1.1) |
762.4 |
736.9 |
3.5 |
||||||
|
Service, body and parts |
331.9 |
294.5 |
12.7 |
864.5 |
771.6 |
12.0 |
||||||
|
Total gross profit |
1,117.2 |
1,161.8 |
(3.8) |
3,081.3 |
2,912.3 |
5.8 |
||||||
|
Gross margin |
||||||||||||
|
New vehicle retail |
12.1 % |
12.1 % |
— bps |
12.6 % |
10.0 % |
260 bps |
||||||
|
Used vehicle retail |
8.0 |
11.2 |
(320) |
9.0 |
11.5 |
(250) |
||||||
|
Finance and insurance |
100.0 |
100.0 |
— |
100.0 |
100.0 |
— |
||||||
|
Service, body and parts |
53.9 |
52.2 |
170 |
54.0 |
53.2 |
80 |
||||||
|
Gross profit margin |
17.9 |
19.3 |
(140) |
18.6 |
18.3 |
30 |
||||||
|
Unit sales |
||||||||||||
|
New vehicle retail |
58,086 |
64,873 |
(10.5) % |
152,689 |
187,024 |
(18.4) % |
||||||
|
Used vehicle retail |
72,292 |
74,363 |
(2.8) |
194,946 |
197,621 |
(1.4) |
||||||
|
Average selling price |
||||||||||||
|
New vehicle retail |
$ 47,695 |
$ 43,540 |
9.5 % |
$ 47,915 |
$ 42,224 |
13.5 % |
||||||
|
Used vehicle retail |
30,158 |
27,348 |
10.3 |
30,308 |
25,597 |
18.4 |
||||||
|
Average gross profit per unit |
||||||||||||
|
New vehicle retail |
$ 5,761 |
$ 5,275 |
9.2 % |
$ 6,040 |
$ 4,232 |
42.7 % |
||||||
|
Used vehicle retail |
2,419 |
3,074 |
(21.3) |
2,740 |
2,947 |
(7.0) |
||||||
|
Finance and insurance |
2,191 |
2,075 |
5.6 |
2,193 |
1,916 |
14.5 |
||||||
|
Total vehicle(1) |
6,007 |
6,215 |
(3.3) |
6,356 |
5,557 |
14.4 |
||||||
|
(1) |
Includes the sales and gross profit related to new, used retail, used wholesale and finance and insurance and unit sales for new and used retail |
|
LAD |
|||||
|
Other Highlights (Unaudited) |
|||||
|
As of |
|||||
|
September 30, |
December 31, |
September 30, |
|||
|
2022 |
2021 |
2021 |
|||
|
Days Supply(1) |
|||||
|
New vehicle inventory |
39 |
24 |
24 |
||
|
Used vehicle inventory |
65 |
61 |
48 |
||
|
(1) |
Days supply calculated based on current inventory levels, including in-transit vehicles, and a 30-day historical cost of sales level. |
|
Financial covenants |
|||
|
Requirement |
As of September 30, 2022 |
||
|
Fixed charge coverage ratio |
Not less than 1.20 to 1 |
2.24 to 1 |
|
|
Leverage ratio |
Not more than 5.75 to 1 |
1.50 to 1 |
|
LAD |
||||
|
Condensed Consolidated Balance Sheets (Unaudited) |
||||
|
(In millions) |
||||
|
September 30, 2022 |
December 31, 2021 |
|||
|
Cash, restricted cash, and cash equivalents |
$ 233.0 |
$ 174.8 |
||
|
Trade receivables, net |
1,009.1 |
910.0 |
||
|
Inventories, net |
3,309.3 |
2,385.5 |
||
|
Other current assets |
135.4 |
63.0 |
||
|
Total current assets |
$ 4,686.8 |
$ 3,533.3 |
||
|
Property and equipment, net |
3,473.0 |
3,052.6 |
||
|
Intangibles |
3,329.9 |
1,776.4 |
||
|
Other non-current assets |
2,584.8 |
2,784.6 |
||
|
Total assets |
$ 14,074.5 |
$ 11,146.9 |
||
|
Floor plan notes payable |
1,662.9 |
1,190.1 |
||
|
Other current liabilities |
1,163.7 |
1,212.7 |
||
|
Total current liabilities |
$ 2,826.6 |
$ 2,402.8 |
||
|
Long-term debt |
5,222.3 |
3,185.7 |
||
|
Other long-term liabilities and deferred revenue |
997.4 |
895.2 |
||
|
Total liabilities |
$ 9,046.3 |
$ 6,483.7 |
||
|
Equity |
5,028.2 |
4,663.2 |
||
|
Total liabilities & equity |
$ 14,074.5 |
$ 11,146.9 |
||
|
LAD |
||||
|
Summarized Cash Flow from Operations (Unaudited) |
||||
|
(In millions) |
||||
|
Nine months ended September 30, |
||||
|
2022 |
2021 |
|||
|
Net income |
$ 1,011.8 |
$ 770.1 |
||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
||||
|
Asset impairments |
— |
1.9 |
||
|
Depreciation and amortization |
122.1 |
91.5 |
||
|
Stock-based compensation |
31.7 |
25.6 |
||
|
Loss on redemption of senior notes |
— |
10.3 |
||
|
Gain on disposal of assets |
(0.4) |
(2.5) |
||
|
Loss (gain) on sale of franchises |
(49.6) |
5.2 |
||
|
Unrealized investment loss (gain) |
32.6 |
22.3 |
||
|
Deferred income taxes |
63.5 |
25.6 |
||
|
Amortization of operating lease right-of-use assets |
37.6 |
27.0 |
||
|
(Increase) decrease: |
||||
|
Trade receivables, net |
(54.0) |
(85.0) |
||
|
Inventories |
(852.4) |
1,003.2 |
||
|
Other assets |
(1,032.5) |
(338.4) |
||
|
Increase: |
||||
|
Floor plan notes payable, net |
101.1 |
91.3 |
||
|
Trade payables |
9.3 |
97.2 |
||
|
Accrued liabilities |
19.1 |
236.9 |
||
|
Other long-term liabilities and deferred revenue |
42.6 |
19.7 |
||
|
Net cash provided by (used in) operating activities |
$ (517.5) |
$ 2,001.9 |
||
|
LAD |
||||
|
Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited) |
||||
|
(In millions) |
||||
|
Nine months ended September 30, |
||||
|
Net cash provided by operating activities |
2022 |
2021 |
||
|
As reported |
$ (517.5) |
$ 2,001.9 |
||
|
Floor plan notes payable, non-trade, net |
429.6 |
(840.9) |
||
|
Non-recourse notes payable, net |
419.4 |
236.0 |
||
|
Less: Borrowings on floor plan notes payable, non-trade associated with acquired new vehicle inventory |
(72.4) |
(271.5) |
||
|
Adjusted |
$ 259.1 |
$ 1,125.5 |
||
|
LAD |
||||||||||
|
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited) |
||||||||||
|
(In millions, except for per share data) |
||||||||||
|
Three Months Ended September 30, 2022 |
||||||||||
|
As reported |
Net disposal |
Investment |
Acquisition |
Adjusted |
||||||
|
Selling, general and administrative |
$ 749.2 |
$ 36.5 |
$ — |
$ (2.0) |
$ 783.7 |
|||||
|
Operating income |
523.1 |
(36.5) |
— |
2.0 |
488.6 |
|||||
|
Other income (expense), net |
(7.1) |
— |
(0.3) |
— |
(7.4) |
|||||
|
Income before income taxes |
455.7 |
(36.5) |
(0.3) |
2.0 |
420.9 |
|||||
|
Income tax (provision) benefit |
(125.4) |
9.8 |
— |
1.9 |
(113.7) |
|||||
|
Net income |
$ 330.3 |
$ (26.7) |
$ (0.3) |
$ 3.9 |
$ 307.2 |
|||||
|
Net income attributable to non-controlling interests |
0.5 |
— |
— |
— |
0.5 |
|||||
|
Net income attributable to redeemable non-controlling interest |
(1.2) |
— |
— |
— |
(1.2) |
|||||
|
Net income attributable to LAD |
$ 329.6 |
$ (26.7) |
$ (0.3) |
$ 3.9 |
$ 306.5 |
|||||
|
Diluted earnings per share attributable to LAD |
$ 11.92 |
$ (0.97) |
$ (0.01) |
$ 0.14 |
$ 11.08 |
|||||
|
Diluted share count |
27.6 |
|||||||||
|
Three Months Ended September 30, 2021 |
||||||||||||||
|
As reported |
Asset |
Investment |
Insurance |
Acquisition |
Loss on |
Adjusted |
||||||||
|
Asset impairments |
$ 1.9 |
$ (1.9) |
$ — |
$ — |
$ — |
$ — |
$ — |
|||||||
|
Selling, general and administrative |
673.3 |
— |
— |
(3.4) |
(6.3) |
— |
663.6 |
|||||||
|
Operating income |
479.5 |
1.9 |
— |
3.4 |
6.3 |
— |
491.1 |
|||||||
|
Other income (expense), net |
(25.7) |
— |
23.2 |
— |
— |
10.3 |
7.8 |
|||||||
|
Income before income taxes |
422.2 |
1.9 |
23.2 |
3.4 |
6.3 |
10.3 |
467.3 |
|||||||
|
Income tax (provision) benefit |
(113.2) |
(0.5) |
(6.2) |
(0.9) |
(1.4) |
(2.7) |
(124.9) |
|||||||
|
Net income |
$ 309.0 |
$ 1.4 |
$ 17.0 |
$ 2.5 |
$ 4.9 |
$ 7.6 |
$ 342.3 |
|||||||
|
Net income attributable to non-controlling interests |
$ (0.8) |
$ — |
$ — |
$ — |
$ — |
$ — |
$ (0.8) |
|||||||
|
Net income attributable to redeemable non-controlling interest |
$ (0.3) |
$ — |
$ — |
$ — |
$ — |
$ — |
$ (0.3) |
|||||||
|
Net income attributable to LAD |
$ 307.9 |
$ 1.4 |
$ 17.0 |
$ 2.5 |
$ 4.9 |
$ 7.6 |
$ 341.3 |
|||||||
|
Diluted earnings per share attributable to LAD |
$ 10.11 |
$ 0.05 |
$ 0.56 |
$ 0.08 |
$ 0.16 |
$ 0.25 |
$ 11.21 |
|||||||
|
Diluted share count |
30.5 |
|||||||||||||
|
LAD |
||||||||||
|
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited) |
||||||||||
|
(In millions, except for per share data) |
||||||||||
|
Nine Months Ended September 30, 2022 |
||||||||||
|
As reported |
Net disposal |
Investment |
Acquisition |
Adjusted |
||||||
|
Selling, general and administrative |
$ 2,256.8 |
$ 49.6 |
$ — |
$ (10.1) |
$ 2,296.3 |
|||||
|
Operating income |
1,564.4 |
(49.6) |
— |
10.1 |
1,524.9 |
|||||
|
Other income (expense), net |
(37.0) |
— |
32.6 |
— |
(4.4) |
|||||
|
Income before income taxes |
1,393.9 |
(49.6) |
32.6 |
10.1 |
1,387.0 |
|||||
|
Income tax (provision) benefit |
(382.1) |
13.2 |
— |
(0.5) |
(369.4) |
|||||
|
Net income |
$ 1,011.8 |
$ (36.4) |
$ 32.6 |
$ 9.6 |
$ 1,017.6 |
|||||
|
Net income attributable to non-controlling interests |
(3.9) |
— |
— |
— |
(3.9) |
|||||
|
Net income attributable to redeemable non-controlling interest |
(4.5) |
— |
— |
— |
(4.5) |
|||||
|
Net income attributable to LAD |
$ 1,003.4 |
$ (36.4) |
$ 32.6 |
$ 9.6 |
$ 1,009.2 |
|||||
|
Diluted earnings per share attributable to LAD |
$ 35.10 |
$ (1.27) |
$ 1.14 |
$ 0.33 |
$ 35.30 |
|||||
|
Diluted share count |
28.6 |
|||||||||
|
Nine Months Ended September 30, 2021 |
||||||||||||||||
|
As reported |
Net disposal |
Asset |
Investment |
Insurance |
Acquisition |
Loss on |
Adjusted |
|||||||||
|
Asset impairments |
$ 1.9 |
$ — |
$ (1.9) |
$ — |
$ — |
$ — |
$ — |
$ — |
||||||||
|
Selling, general and administrative |
1,757.6 |
(5.2) |
— |
— |
(5.0) |
(17.9) |
— |
1,729.5 |
||||||||
|
Operating income |
1,164.2 |
5.2 |
1.9 |
— |
5.0 |
17.9 |
— |
1,194.2 |
||||||||
|
Other income (expense), net |
(14.6) |
— |
— |
22.3 |
— |
— |
10.3 |
18.0 |
||||||||
|
Income before income taxes |
1,053.0 |
5.2 |
1.9 |
22.3 |
5.0 |
17.9 |
10.3 |
1,115.6 |
||||||||
|
Income tax (provision) benefit |
(282.9) |
(1.4) |
(0.5) |
(6.0) |
(1.4) |
(4.5) |
(2.7) |
(299.4) |
||||||||
|
Net income |
$ 770.1 |
$ 3.8 |
$ 1.4 |
$ 16.3 |
$ 3.6 |
$ 13.4 |
$ 7.6 |
$ 816.2 |
||||||||
|
Net income attributable to non-controlling interests |
(0.8) |
— |
— |
— |
— |
— |
— |
(0.8) |
||||||||
|
Net income attributable to redeemable non-controlling interest |
(0.3) |
— |
— |
— |
— |
— |
— |
(0.3) |
||||||||
|
Net income attributable to LAD |
$ 769.0 |
$ 3.8 |
$ 1.4 |
$ 16.3 |
$ 3.6 |
$ 13.4 |
$ 7.6 |
$ 815.1 |
||||||||
|
Diluted earnings per share attributable to LAD |
$ 26.91 |
$ 0.13 |
$ 0.05 |
$ 0.57 |
$ 0.13 |
$ 0.47 |
$ 0.26 |
$ 28.52 |
||||||||
|
Diluted share count |
28.6 |
|||||||||||||||
|
LAD |
||||||||||||
|
Adjusted EBITDA and Net Debt to Adjusted EBITDA (Unaudited) |
||||||||||||
|
(In millions) |
||||||||||||
|
Three months ended |
% |
Nine months ended |
% |
|||||||||
|
Increase |
Increase |
|||||||||||
|
2022 |
2021 |
(Decrease) |
2022 |
2021 |
(Decrease) |
|||||||
|
EBITDA and Adjusted EBITDA |
||||||||||||
|
Net income |
$ 330.3 |
$ 309.0 |
6.9 % |
$ 1,011.8 |
$ 770.1 |
31.4 % |
||||||
|
Flooring interest expense |
10.7 |
3.6 |
197.2 |
19.4 |
17.0 |
14.1 |
||||||
|
Other interest expense |
49.6 |
28.0 |
77.1 |
114.1 |
79.6 |
43.3 |
||||||
|
Income tax expense |
125.4 |
113.2 |
10.8 |
382.1 |
282.9 |
35.1 |
||||||
|
Depreciation and amortization |
41.9 |
34.4 |
21.8 |
122.1 |
91.5 |
33.4 |
||||||
|
EBITDA |
$ 557.9 |
$ 488.2 |
14.3 % |
$ 1,649.5 |
$ 1,241.1 |
32.9 % |
||||||
|
Other adjustments: |
||||||||||||
|
Less: flooring interest expense |
$ (10.7) |
$ (3.6) |
197.2 |
$ (19.4) |
$ (17.0) |
14.1 |
||||||
|
Less: used vehicle line of credit interest |
(2.6) |
— |
NM |
(4.8) |
— |
NM |
||||||
|
Add: acquisition expenses |
2.0 |
6.3 |
(68.3) |
10.1 |
17.9 |
(43.6) |
||||||
|
Add: loss (gain) on divestitures |
(36.5) |
— |
NM |
(49.6) |
5.2 |
NM |
||||||
|
Add: investment loss (gain) |
(0.3) |
23.2 |
(101.3) |
32.6 |
22.3 |
NM |
||||||
|
Add: insurance reserves |
— |
3.4 |
NM |
— |
5.0 |
NM |
||||||
|
Add: loss on redemption of senior notes |
— |
10.3 |
NM |
— |
10.3 |
NM |
||||||
|
Add: asset impairment |
— |
1.9 |
NM |
— |
1.9 |
NM |
||||||
|
Adjusted EBITDA |
$ 509.8 |
$ 529.7 |
(3.8) % |
$ 1,618.4 |
$ 1,286.7 |
25.8 % |
||||||
|
NM – not meaningful |
|
As of |
% |
|||||
|
September 30, |
Increase |
|||||
|
Net Debt to Adjusted EBITDA |
2022 |
2021 |
(Decrease) |
|||
|
Floor plan notes payable: non-trade |
$ 1,208.1 |
$ 688.9 |
75.4 % |
|||
|
Floor plan notes payable |
454.8 |
329.4 |
38.1 |
|||
|
Used and service loaner vehicle inventory financing facility |
1,061.8 |
— |
NM |
|||
|
Revolving lines of credit |
1,396.0 |
404.8 |
244.9 |
|||
|
Real estate mortgages |
545.3 |
606.0 |
(10.0) |
|||
|
Finance lease obligations |
113.8 |
54.1 |
110.4 |
|||
|
Asset backed notes |
494.1 |
— |
NM |
|||
|
4.625% Senior notes due 2027 |
400.0 |
400.0 |
— |
|||
|
4.375% Senior notes due 2031 |
550.0 |
550.0 |
— |
|||
|
3.875% Senior notes due 2029 |
800.0 |
800.0 |
— |
|||
|
Other debt |
1.5 |
2.1 |
(28.6) |
|||
|
Unamortized debt issuance costs |
(26.8) |
(24.0) |
11.7 |
|||
|
Total debt |
$ 6,998.6 |
$ 3,811.3 |
83.6 % |
|||
|
Less: Floor plan related debt |
$ (2,724.7) |
$ (1,018.3) |
167.6 % |
|||
|
Less: Cash, restricted cash, and cash equivalents |
(233.0) |
(152.8) |
52.5 |
|||
|
Less: Availability on used vehicle and service loaner financing facilities |
(34.3) |
(707.1) |
(95.1) |
|||
|
Net Debt |
$ 4,006.6 |
$ 1,933.1 |
107.3 % |
|||
|
TTM Adjusted EBITDA |
$ 2,150.9 |
$ 1,552.0 |
38.6 % |
|||
|
Net debt to Adjusted EBITDA |
1.86 x |
1.25 x |
||||
|
NM – not meaningful |
SOURCE Lithia Motors, Inc.